For years, knowing how vast the opportunity is, I’ve been trying to figure out how to better facilitate promising clean technologies in entering China to make a big environmental impact (and, of course, do well commercially and financially in doing so). Of course, I’m not alone, and others have acted while I pondered: organizations such as JUCCCE and the US-China Clean Tech Center have arisen in the past few years to offer their services. I guess they’ve been able figure out what I couldn’t: a clear strategy and compelling business model for serving as a conduit for cleantech dissemination into China from outside China.

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Earlier this month, I turned 50 years old. Such milestones are natural occasions for reflection.

Beyond recalling many of the phases and individual episodes of my life, my reflection included a consideration of how the world had changed in the 50 years in which I had lived. And, naturally, given my profession, I pondered what it would have been like to have been a “cleantech” practicioner 50 years ago, in 1962.

Frankly, it’s not really possible to imagine “cleantech” back then. 50 years ago, there wasn’t much “clean” and there wasn’t much “tech”.

In the energy sector, the U.S. still dominated the petroleum industry. Not only did Americans consume more petroleum than anyone else (accounting for about 40% of world demand), U.S. oil production was still a major factor, representing almost 30% of worldwide production.

The oil industry’s operations would still have been very recognizable by John D. Rockefeller: production was mainly from “conventional” onshore seesaw pumpers dotting the countryside; remote locations such as Alaska hadn’t yet been touched, nor had any material production yet been achieved from offshore wells.

Other than perhaps by watching the recently-released “Lawrence of Arabia”, few Americans paid much attention to the deserts of the Middle East in 1962.

Though unnoticed by most Americans, important forces in the oil industry were already beginning to shift in the early 1960s. Although Texas oil production had been decisive in fueling the Allied victory in World War II just two decades previously, by 1962, the U.S. had become a net importer of oil. Yet, only King Hubbert projected a future waning of American supremacy in oil production.

Oil prices in 1962 were a little less than $3/barrel, largely due to the price-setting powers of the Railroad Commission (RRC) of Texas, then still the source of a significant share of world oil production. When a hitherto little-noticed group formed in the early 1960s called the Organization of the Petroleum Exporting Countries (OPEC) assumed the dominant influence in pricing oil a decade later, the world would change forever, as oil prices would never again be anywhere near below $10/barrel.

It’s almost quaint to summon up memories of the oil sector of the era. Remember what filling up at a gas station was like in the 1960s? The attendant would come out, put the nozzle in the tank (always with the filler behind the rear license plate), cheerfully wipe the windshield and ask “may I check your oil?”. Looking out the window, I remember seeing “29.9” on the gas pumps. That’s 29.9 cents per gallon — which seems almost surreal to us now, but remember, oil prices were then only a few percent of what they are today.

Of course, given the now-unbelievably appalling gas mileage of those Detroit beasts, usually under 10 miles per gallon, you still had to fill up about as often then as you do now. Back then, it was all about horsepower — it certainly wasn’t about efficiency, nor about cleanliness. (Nor, for that matter, reliability.)

Every once in awhile these days, I find myself behind a 1960s-vintage car at a stoplight, most often on a sunny summer afternoon. When the light turns green, I am left in a thin cloud of light bluish smoke and the fragrance of octane and unburned hydrocarbons. Odors of my youth. You don’t see and smell that anymore — and I don’t miss it.

Thank goodness for a plethora of cleantech innovation during the past decades: unleaded fuels, pollution controls and fuel injection systems.

And, let’s not forget that these advances were pushed by, only happened because of, foresightful proactive policies.

While the financial bonanzas and corporate/family dramas enabled by oil discoveries and production had thoroughly captured the American imagination by the early 1960s — consider everything from “Giant” to “The Beverly Hillbillies” — natural gas in 1962 was an afterthought. Other than some use for power generation in Texas and Oklahoma (where there was no local coal resource), natural gas was mostly flared at the wellhead. In many ways because (and many people now forget this) natural gas prices were then regulated at depressed levels, the companies that produced gas as a side-consequence from oil production didn’t see much value in making the investments necessary to collect it and transport it to markets. In fact, natural gas was widely considered a nuisance in 1962.

Certainly, gas is no longer considered a nuisance. In fact, it’s now being touted by politicians across the U.S. as the Godsend: providing lower energy prices, lower emissions, higher domestic employment and reduced dependence on foreign energy sources.

No, the oil/gas industry — and those two fuels are today inextricably intertwined — is now much more aggressive in capturing and processing every Btu that courses through the markets.

In the late 1960s, our family lived in the Philadelphia area, and I remember being awed – almost scared, really – by the immense flames emitted by the refinery near the mouth of the Schuylkill River. All those now-valuable hydrocarbons…gone, wasted, up in smoke. You don’t see that anymore at refineries, thankfully.

Oil company practices have massively changed in the past 50 years to capture everything of possible economic value. Of course, that’s the effect of a 30x increase in oil prices, driven by a worldwide search and race to find and produce new reserves to replace five decades’ worth of depletion of much of the cheap/easy stuff in the face of a tripling of global oil demand (mostly from outside the U.S.), counterbalanced by technological progress on a host of fronts over the span of five decades.

Today, oil is pretty consistently trading between $80-100/barrel, and while U.S. oil production has rebounded a bit to approach early 1960s levels, American production now accounts for less than 10% of world oil production.

But think about how low U.S. oil production would be and how high oil prices might be today if not for offshore oil production, directional drilling, 3-D seismic, and an untold number of other innovations produced by the oil patch in the last half-century to enable production from hitherto undeveloped places.

Of course, beauty is in the eye of the beholder, and not all of these developments are viewed positively by everyone. The current debates about fracking and development of the Alberta oil sands would have been unimaginable in 1962. At the time, fracking barely existed as a practice, and the Alberta oil sands were then hopelessly uneconomic as a source of fuels. Moreover, there was virtually no environmental movement to give voice to the concerns of citizens.

If you are about my age or older, you may well remember this 1971 commercial. The tagline (“People start pollution, people can stop it”) and the image of the Native American shedding a tear remain indelible decades later.

Before this, there was virtually no accountability placed on emitters, and anyone could pretty much dump whatever they wanted, wherever they wanted, whenever they wanted. And, in the early 1960s, no set of interests benefitted from ongoing inattention to environmental considerations in the U.S. more than the coal sector. For those with coal interests, the times before environmentalists were truly the glory days — and in 1962, the future for coal in the U.S. at that time was terrifically bright.

Sure, trains had just moved from coal steam to diesel-electric, but over half of all the electricity generated in the U.S. in 1962 was based on burning coal. With burgeoning demand for electricity (especially to keep pace with the exploding utilization of increasingly-ubiquitous air conditioning), coal was poised for significant growth, as thousands of megawatts of new coal powerplants would be added to the nation’s energy grid each year during the 1960s.

While coal is certainly no poster-child for the cleantech sector today, back in 1962, coal remained a particularly brutish and nasty form of energy. 288 American miners were killed on the job in 1962, and all of the coal burned was subject to minimal pollution control – no electrostatic precipitators or baghouses to capture particulates (i.e., soot), much less scrubbers for sulfur dioxide or selective catalytic reduction for nitrogen oxide emissions. You pretty much didn’t want to be a coal miner or live anywhere near a coal-burning powerplant, as your health and longevity were seriously at risk.

Indeed, some observers speculate that the uncontrolled emissions from powerplants (not to mention other industrial facilities, such as steel mills) threw up such large amounts of material into the atmosphere that the 1970s became a period of unusually cold temperatures — to the point that many scientists were projecting a future of damaging global cooling. (Although the then-common theory of global cooling is now mainly forgotten, climate change deniers are quick to employ this prior dead-end of thought as one reason for dismissing the strong likelihood suggested by climate scientists that global warming is probably occurring today.)

Of course, the U.S. still mines coal, lots of it, to fuel lots of coal-fired powerplants. Production in 2011 was 1.1 billion tons, more than double 1962 levels. However, employment in the coal industry had fallen by over 40% during the same period. (And, mercifully, annual fatalities have decreased by a factor of 10.) The primary factors for these changes: productivity increases due to new technologies (e.g., longwall mining), lower rates of unionization, and a shift from underground to surface mining (now accounting for nearly 70% of U.S. production).

With respect to the latter factor, Wyoming coal activity has exploded — now representing more than 40% of U.S. production — at the expense of Appalachia, whose coal sector is now but a shell of what it was 50 years ago. The causes are simple: the subbituminous Powder River stuff from Wyoming is much more abundant and cheaper to mine, and generally has much lower sulfur content to boot, than what is available from Appalachia.

On a broader level, coal is on the retreat in the U.S.: while coal still accounts for almost 50% of power generation, this share is dwindling. It seems as though U.S. coal production levels have plateaued at just over 1 billion tons a year. While so-called “clean-coal” technologies may at some point provide the basis for a resurgence in the industry, the possibility of future growth certainly seems far from obvious today.

Many legacy coal powerplants – some of which remain in operation from well more than 50 years ago – are fading away. Tightening emission requirements, particularly on toxic emissions such as mercury, are just one competitive disadvantage facing coal; coal power is increasingly uncompetitive with cheap and cleaner natural gas powerplants and (in some places) wind and solar energy.

“Wind energy” and “solar energy”: 50 years ago, these would have been oxymorons. Other than the minute niches of sailboats and waterwell pumping in the Great Plains, a good wind resource had virtually no commercial value in 1962. At the same time, Bell Labs scientists were wrangling some with solar energy technologies — primarily for satellites – although a lot more attention was being paid to a related device called the semiconductor.

For energy, scientists were mainly working on nuclear power, moving from weapons and Navy submarines to powerplants. The nuclear era was dawning: electricity was going to be “too cheap to meter”.

The very first commercial nuclear powerplant, the relatively puny 60 megawatt plant at Shippingport in Western Pennsylvania, had been running for only a few years in 1962, though dozens of nuclear powerplants were just coming onto the drawing boards. Visionaries were even talking about nuclear-powered automobiles in 1962. (“Electric vehicles? Puh-lease. Batteries are for cheap portable Japanese radios.”)

Perhaps as a psychological defense mechanism to drown out the anxieties associated with potential Armeggedon from a Cold War missile exchange, such was the sense of optimism in the possibilities of the age.

Apparently, no-one could foresee Three Mile Island, Chernobyl or Fukushima at the time.

The future held boundless possibilities. Back then, who needed to recycle? To think about efficient utilization of resources? To care about water quality or air quality? There was always more and better, somewhere, to be had. And we Americans would surely obtain it, somehow and someway. It was Manifest Destiny, ever-onward.

This American philosophy may have confronted its limits early in my lifetime with the ultimate realization, brought home so vividly at the end of the 1960s by the first-ever images of the solitary Earth as provided by the Apollo program, that we’re all utterly dependent upon a finite planet in an infinite sea of otherwise-unpopulable space. Earth Day followed in April 1970.

To commemorate this first Earth Day, I remember our second-grade class picking up scads of litter along the side of a section of highway. Upon reflection, I am glad to note how much litter has declined in subsequent years — a case of how values can be reshaped and behaviors can be changed, if people are just a bit more conscious.

That’s a positive take. However, one can reasonably look back on 50 years of the evolution of the energy sector and say, well, that not that much has really changed in America.

True, the basic structure of American life may not have changed too dramatically.

We still primarily live in single family dwellings, in suburbia, dependent upon cars that look more or less the same, fueled by gasoline available at stations just down the road. The power grid is still there, powered by central-station powerplants; the light switches and outlets haven’t changed, with refrigerators still in every kitchen and TVs in every living space.

By all measures, Americans are still energy hogs, relative to the rest of the world.

Even so, I would assert that a lot has changed, at both the macro and micro-level, that have consequentially altered the trajectory of resource utilization in America from the path determinedly being travelled 50 years ago.

Admittedly, some of the changes we have experienced are a bummer: niceties like summer evenings with the windows open are much rarer. Nevertheless, I claim that most of the changes of the past half-century are positive – and can be attributed to a significant degree to what we now call “cleantech”.

Our energy bounty, improved so significantly by technological innovation, has been achieved while simultaneously improving environmental conditions in almost every respect. Notwithstanding the substantial increase in carbon dioxide emissions, almost all other manifestations of environmental impact from energy production and use have dramatically improved in the past half-century. Standards of living enabled by modern energy use, here in America and even more so in the rest of the world, have dramatically improved.

Moreover, the trends for further future improvement on all these fronts are favorable.

With the proliferation of improved technologies such as LED lighting, energy efficiency continues to advance. Renewable energy continues to gain share: wind and solar energy represented about a quarter of new U.S. electricity generation additions in 2010. Citizen understanding of energy and environmental issues continues to become more sophisticated.

Beyond the forces specifically pertaining to the energy sector, a number of broader influences in U.S. society are improving the prospects for accelerating cleantech innovation and adoption. Entrepreneurship is booming, consumerism is increasingly being called into question, capital markets are more amenable to investment in this sector and more capital is arriving accordingly, and the Internet makes an immense and ever-expanding pool of information freely available to enable better decisions.

Not to mention: much of the opposition to a transition to the cleantech future emanates from people in generations that are older, that will die out in the next couple of decades, to be replaced by younger generations that are generally more supportive of increased cleantech activity.

So, while it’s easy to get discouraged by the impediments to cleantech progress on a day-to-day basis, over the long-view, it’s pretty apparent that big positive things can happen and in fact are happening.

50 years from now, in 2062, I hope to be alive and well at 100 and still contributing to the cleantech sector. That may be overoptimistic. But I don’t think it’s at all overoptimistic that we’ll see more changes, and more changes for the better, in the cleantech realm over the next 50 years than in the previous 50.

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I’ve been working with new energy inventions and their creators for almost 15 years now. I don’t know how many times I’ve heard a new technology described as “the Holy Grail”: solving all of the world’s problems forever.

Well, here’s the newest one using the Holy Grail cliche: a supposedly carbon-neutral method of using microbes to convert electricity into natural gas.

The carbon-neutrality of this approach stems from (1) using surplus electricity generation from non-emitting wind or solar and (2) the microbe extracts the carbon atom for the methane from the CO2 in the atmosphere.

So, in theory, one can make an infinite supply of a relatively clean fossil-fuel from renewable electricity by sucking carbon out of the air. And, given the extensive natural gas pipeline, storage and distribution network, this fuel could be used for baseload power generation, traditional space/water heating and cooking purposes, and even transportation (e.g., natural gas vehicles).

The catch: as is often the case with early discoveries in university labs, the researchers don’t know how to scale the technology and achieve consistent/stable results at commercially-useful levels. The economics are also highly uncertain.

Don’t hold your breath. This type of invention could take a very very long time to turn into something that’s viable for the energy marketplace. As a long-time executive from one of the supermajors once said to me, it takes 12-24 months to really prove something at the next order of magnitude — and in energy, it’s usually several orders of magnitudes of expansion from the laboratory to the field. Thus, what seems like an overnight success story usually has a decade or more of development behind it.

So, while this discovery might turn out to be the Holy Grail — and it definitely seems worth monitoring — one should not get too excited just yet. There are a lot of potential hurdles to be overcome, and some of them may not be surmounted. Even if the technology develops favorably, it’s a long way from being ready for prime-time.

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It’s Presidential Election year. Ergo, time to discuss our 40 year whacked out excuse for an energy policy. Royally botched up by every President since, umm?

Objectives:

Make US energy supply cheap for the US consumer and industry, fast growing and profitable for the American energy sector, clean, widely available and reliable, and secure, diversified, environmentally friendly and safe for all of us.

or

Cheap, Clean, Reliable, Secure, Energy

An Energy Policy that leaves us more efficient than our competitors

An Energy Policy that leaves us with more and more diversified, supply than our competitors

An Energy Policy that leaves us more reliable than our competitors

An Energy Policy that makes us healthier and cleaner than our competitors

An Energy Policy that makes us able to develop adopt new technologies faster than our competitors

An Energy Policy that makes it easy for industry to sell technology, energy, and raw materials to our competitors

An Energy Policy that keeps $ home.

A Sane Energy policy

Think more drilling, less regulation on supply, lower tariffs, more investment in R&D, tighter CAFE and energy efficiency standards, simpler and larger subsidies for new technologies, less regulation on infrastructure project development.

A couple of key action items:

Support the development of new marginal options for fuel supply, and support options that improve balance of payments, whether EVs ethanol, solar et al

Support expansion and modernization of gas, electric, and transport infrastructure

Support long term R&D in both oil & gas, electric power, and renewables

Reduce time to develop and bring online new projects of any type (yes that means pipelines, solar and wind plants, offshore drilling, fracking and transmission lines).

Support policies and technology that enable linking of energy markets

Challenge the OPEC cartel like we do EVERY OTHER cartel and break the back of our supply contraints

Support the export of our energy industry engineering, services and manufacturing sectors overseas

Incorporate energy access into the core of our trade policy

Support deregulation of power markets

Support long term improvement in environmental and safety standards

Broadly support significant per unit market subsidies for alternatives like PV, wind, biofuels, fracking as they approach competitiveness

Or we could do it the other way:

Leave ourselves locked into single sources of supply in a screwy regulated market that involves sending massive checks to countries who’s governments don’t like us because that’s the way we did it in the 50s?

Keep massive direct subsidies to darling sectors so the darling sectors can fight each other to keep their subsidies instead of cutting costs?

Keep a mashup of state and federal regulatory, carbon and environmental standards making it virtually impossible to change infrastructure when new technology comes around?

Promote deregulation in Texas, and screw the consumer in every other market?

Every time there’s a crisis, we can shoot the industry messenger in the head, stop work, and subsidize something.

Continue the Cold War policy of appeasing OPEC so they can keep us under their thumb for another 30 years

And in the meantime how about making energy taxes (a MASSIVE chunk of your gasoline and power prices) variable, so they go DOWN when prices go up. Then at least the government’s pocket book has an incentive to control cost, even if they’re incompetent at putting together a policy that does so.

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For several years, the U.S. military has been one of the most active proponents and early-adopters of renewable energy and alternative fuels, with their Operational Energy Strategy. Why? Several reasons:

1. Fuel delivered to the remote front-lines such as in Afghanistan for use in power generation and transportation has an “all-in” cost of $400/gallon. Any energy source that can be supplied locally, such as solar, to reduce fuel has significant potential for economic savings.

2. Being of critical logistical importance, convoys to deliver fuel are often the target of insurgent attacks, resulting in casualties to American servicemen and -women. Anything that can reduce the quantity and frequency of these convoys should obviously be a very good thing.

3. In buying so much oil, America sends hundreds of billions of dollars each year to regimes that not only don’t like the U.S., but actively attack U.S. interests. As many astute observers such as James Woolsey, former head of the CIA has said on a number of occasions, “we are funding both sides of the war on terror.” Military reliance upon oil is a key contributing factor.

Now comes James Bartis of the RAND Corporation, who argues in a recent study that “military planners are afflicted with petroleum anxiety.” He says that the military shouldn’t be so worried about oil price increases and supply insecurity: “they think prices are heading in only one direction: up. But history teaches us otherwise.”

I pronounce Bartis and McCain guilty of imprudent short-term thinking — which is surprising and highly disappointing, since I have generally considered RAND and McCain himself as having a good grasp of the big picture.

The military’s energy strategy is not solely or even mainly about minimizing $/gallon or c/kwh, and it’s certainly not about environmental benefits. This is about building and operating a military that is best suited to win against a dispersed enemy that derives its income from oil sales and targets oil supply lines to impede American military effectiveness and kill Americans.

Period.

Reducing oil consumption as much and as quickly as reasonably practicable is key to unhooking our military from this thorny problem. True, part of reducing oil consumption is through increased efficiency, but part of reducing oil consumption can also be via substitution of alternatives: biofuels, solar, and wind.

Whether the military’s push for renewable energy will be as successful as desired is unclear. However, the only way to know is to try. If they don’t try, the U.S. military — and our country more generally — will just paint itself further into the corner in which it finds itself strategically today.

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Our Cleantech Linkedin Group, over 20,000 members strong, has had a seven month running discussion started by Robert Drummond entitled “Renewable Energy that will Really work”, asking for readers views on what’s practical in renewable energy. Kind of crowd sourcing opinion and facts on the subject of renewable energy. Robert’s discussion reached a staggering 1,500 comments this month. It’s a real “cleantech democracy”, and a testament to the passion we all have for this sector, so I wanted to share it with you. Throw your own comments in here or back on LinkedIn, but definitely participate!

Renewable Energy that will Really Work

By Robert Drummond

“I want to start a discussion about renewable and clean energy supply and distribution that will work in the forseeable future. I have read so much rubbish that I want to hear the views of people that know about each possibility and are not afraid to tell us all.

Since I have a lot of hang-ups and opinions that need to be checked I will fire-off first.

Renewable energy sources

Hydro. One of the best but not many places left in the world where it will make much of a difference. Some people hate dams so it isn’t universally loved.

Nuclear Fusion. This is the holy grail but seems too far away and even when it comes (if ever) it will be full of dangers and risks both real and political. The thought that it is just doing what the sun does appeals but I am not holding my breath.

Nuclear Fission. This is not really renewable and whether it is green or clean is equally debatable. Most major economies are renewing their commitment to it and it will play a bigger part in energy production in the future. The fear of mis-use of the technology and the huge capital investment and decommissioning costs will ensure that it never gets to become the big success that some would like.

Solar – Photovoltaic. This is the flavour of the year since everyone understands it and it seems to be as clean as you can get. Of course it does “pollute” the countryside and the materials used are not as benign as we would like but it works and is getting cheaper as the technology improves. This may be the first major alternative to pass the fully commercial test. However it is not portable and only works in the daytime. So we have to capture the electricity for use at night (or have alternative sources to match). Also it will not answer our prayers for a replacement to fossil fuels for transport until we have a better way of storing electricity efficiently with light weight devices.

Wind. I am told that the big problem with wind is that the off-shore farms (which everyone likes since they don’t want one in their own back-yard) suffer from three problems. Firstly the very large generators that are most efficient are extremely heavy and constructing them off-shore is mighty expensive. Secondly they are prone to damage and wear (particularly due to UV and salt and the problems of transmitting the rotary power to an effective generator). Thirdly the electricity is likely to be some way from the consumer which means loss in transit.
We also have the same problems about intermittant power generation and lack of portability of electricity.

Wave. Most of the technology is highly suspect and my friends say it wont work except in a limited local way with simple up and down pstons for pumping for uses such as desalination.

Tidal/Current. These seem quite hopeful but there are only limited places in the world with sufficient water flow to achieve anything worthwhile. Even if they succeed and do not foul-up or kill all the fish they will like hydro-electric soon run out of available good locations. They have the advantage of being hidden from view. Again the problems of intermittancy in most places and also they generate electricity.”

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Something grand is emerging on the vast dusty plains of West Texas and Eastern New Mexico.

Tres Amigas is an ambitious scheme to interconnect the three primary power grids in the U.S. — the Western grid known as WECC, the Eastern grid known as the Eastern Interconnection, and the Texas grid known as ERCOT.

As profiled in an article called “A Highway for the 21st Century” in the recent edition of Energy Biz magazine, Tres Amigas aims to incorporate high-voltage direct current (HVDC) and grid-scale energy storage technologies to enable synchronization and massive power transfer capability across the three grids — which are almost completely separated today.

Although it might seem straightforward to tie together three power grids, this is actually a very challenging technological problem. AC to DC to AC converter stations are required at the interfaces, relying upon HVDC technologies that, while beginning to be more commonly employed, have never been deployed at the scale — 5 gigawatts initially, up to 30 gigawatts eventually — contemplated by Tres Amigas. And, to absorb the large swings in generation provided by wind and solar projects in the Great Plains, Texas and the Desert Southwest, Tres Amigas aims to install utility-scale batteries, a still-developing area of technology.

Not surprisingly for a large and first-of-a-kind project, it’s not cheap. Tres Amigas is forecasted to require up to $1 billion in capital. The question will be whether the investors in Tres Amigas can make good returns.

Presumably, the business model is based on a combination of wheeling charges (revenues from renewable energy project developers seeking to move power from source to load centers) and ancillary service fees (charges to the three grid operators to keep each of them more stable in the face of shifting supply and demand conditions). A “merchant project” of this type and magnitude has never been tried. No doubt, it’s a very risky bet.

Not surprisingly, American Superconductor (NASDAQ: AMSC), whose technologies are at the core of Tres Amigas and who would stand to benefit big-time from its success, is an investor sponsoring the development team. It wouldn’t surprise me to see the battery supplier, when chosen, also joining the mix.

The upside of Tres Amigas to renewable energy interests is big. If the project is completed, works well, and remains financially solvent, it will debottleneck many limits to adding further wind and solar projects in the Southwestern U.S. There’s plenty of sun and wind out there, but the constraining factor in tapping it has been the ability of the power grid to cope with the inherent fluctuations in power output.

With its energy storage capability and linkage across three grids, Tres Amigas would be big and bold enough to enable many heretofore thwarted renewable project developers West of the Mississippi to effectively reach a broader spectrum of potential customers from L.A. to Dallas to St. Louis, while mitigating the operational problems — such as those at the infamous congestion point near McCamey TX — that grid operators and other skeptics use as a basis for criticizing or objecting to renewable energy development.

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It’s true. Cleantech investment hasn’t worked out exactly how people dreamt it would back in the overly-optimistic days of the last decade. One of the main obstacles deterring venture capital investors from the sector is the frequently lengthy time lag between investment and commercialization. More importantly, the number of successful cleantech exits remains few — often because either the technology is not as disruptive as competing solutions or it is simply taking longer to adopt it.

The other fly in the ointment is the large-scale capital expenditures required to develop the technology in the first place. Clean technologies can be incredibly capital-intensive in the developmental and commercialization stages. The level of investment required can and have discouraged further investors from committing to later and larger rounds of capital raises. When this problem is compounded with that of actually getting to commercialization it is not hard to see why many venture capital funds are decidedly more cautious about investment in cleantech than they were just a few years ago.

And these are not the only snags. The downturn in the world economy has drastically reduced the political appetite for renewable energy, especially in the US; the untimely death of President Obama’s cap-and-trade bill is testament to that. So although Feed-in-Tariffs continue to provide incentives for new developments, the fact that there is no price on carbon production and no penalties for over-producing it in the US mean that alternative energy remains a less attractive alternative than fossil-fuel.

But despite this doom and gloom, there are still very good reasons for investors to stay the course and persevere with the cleantech sector. The primary reason for this is the still-gigantic potential in a number of key markets which, when successfully exploited, are going to reap huge dividends for those who crack them and invested in the achievement.

Look, for example, at utility-scale energy storage. Lack of energy storage means that wind and solar energy is less viable at the moment than it could be. Because energy from these sources is often produced at times which do not correlate with peak energy demand and because a viable utility scale storage solution has yet to emerge, renewable energy has been unable to achieve grid parity. In West Texas, some wind power generators have had to pay the state grid operator to take the energy off their hands in order to continue qualifying for federal tax credits. These costs are inevitably passed on to the consumer, so a breakthrough in large-scale energy storage will have an enormous impact on the profitability of renewables such as wind and solar. Whoever manages to solve this problem and develop an affordable method of energy storage is going to be able to sell it to every alternative energy generator in the world, and the returns on their investments will be huge.

Another massive potential market is the development of a viable system for carbon capture and sequestration. The two largest economies in the world, the U.S. and China, possess the world’s largest and third-largest coal reserves respectively, and it is highly unlikely that they will completely ignore such a cheap and abundant source of energy. But the environmental effects of burning coal have extremely heavy long-term costs, so the development of efficient, zero-emissions coal plants will revolutionize the energy market. It is a simply inescapable fact that the rewards for anyone who has the vision and staying power to invest in developing this technology will match the size of the gigantic market for clean coal-derived energy.

Low-cost desalination is going to be yet another definite winner in the near future. Climate change is creating new and unforeseen changes in global weather patterns. For example, there are fears that the south Asian monsoons will weaken and become less consistent. Given that the monsoon accounts for 80 percent of India’s total rainfall, a serious change in this weather pattern would without a shadow of a doubt need to be redressed with alternative sources of clean water. Benjamin Franklin was wrong; it’s not just death and taxes that are certain in this world, the market for clean water is too because we simply cannot live without it. Low cost desalination will be developed; the only question is who will have had the foresight to invest.

Vertical (or protected) farming could be another huge future market. The rising middle class in the two most populous nations on earth, China and India, is increasing global demand for food. If this new emerging middle class population’s shopping patterns mirror the US middle class’s grocery trends – where the number one grocery item is bagged leafy greens, for example – there is sure to be a sharp increase in demands for greater availability and variety of produce. To sustain the world’s ever increasing demand for food, new farming methods will have to be developed to feed today’s seven billion hungry mouths and the nine billion of 2050. Low-cost protected farming, using hydroponic and aeroponic farming methods within large urban structures, could provide one of the answers to the conundrum of feeding an ever-growing world population. It would also improve food freshness, cut down on carbon emissions caused by food refrigeration and transportation and halt soil degradation caused by pesticide and herbicide usage. Like the issue of fresh water, this is a riddle that will be solved because it has to be solved. And, once it is solved, everyone will be buying.

And the world’s most abundant energy source must not be forgotten either. The photovoltaic cells that convert solar energy into electricity currently lack the efficiency to achieve grid parity, making solar energy and PV systems a viable, long-term prospect for replacing fossil fuels. But improved efficiency of 30 to 40 percent will make solar power a much more competitive energy source. The development of light-trapping photovoltaic cells, and the adaptation of manufacturing lines to accommodate the new technology, could deliver the required increase in efficiency. Once this is achieved, harnessing the output of the gargantuan energy factory we call the Sun will become competitive and another enormous market will have been created.

What is most needed at the present time, though, is an ability to look beyond the current obstacles to the rewards that renewed investment and perseverance will reap for those who commit and stay the course. The cut-and-run trend witnessed of late in the cleantech sector is exceedingly myopic as the development of clean and green technologies is a necessity the world cannot do without. Climate change, the growing unpredictability of global weather patterns, urbanization, a mushrooming middle class within the emerging economies and depletion of fossil fuels are all global problems that need to be rapidly addressed. Necessity is the mother of invention and these issues will be solved one way or another. The only question is, who will have the prescience and perspicacity to be part of the future?

David Anthony is the Managing Partner of 21Ventures, LLC, a VC management firm that has provided seed, growth, and bridge capital to over 40 technology ventures across the globe, mainly in the cleantech arena. David Anthony is also Adjunct Professor at the New York Academy of Sciences (NYAS) and the NYU Stern School of Business where he began teaching technology entrepreneurship in 2009.

David received his MBA from The Tuck School of Business at Dartmouth College in 1989 and a BA in economics from George Washington University in 1982. He is an entrepreneurship mentor at the Land Center for Entrepreneurship at Columbia University Graduate School of Business. In 2002, David was awarded the Distinguished Mentor of the Year Award from Columbia University.

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This week I’m going to break one of my self-imposed ‘blog’ rules and dip into last week’s news. My reasoning will become clear.

On Thursday I attended Envirolink North West’s Developing New Technologies for off Shore Wind event at the Met in Leeds. Apart from gaining a new respect for gearboxes (not to mention the humble bearing), I was struck by a presentation delivered by Dr. Mike Barnes of the University of Manchester and Siemens Transmission and Distribution arm.

In particular, he highlighted a ‘desertec’ vision for future energy generation, whereby huge swathes of African and Middle Eastern deserts are used for the generation of solar and wind energy. Drawing on commentary delivered by Matthias Ruchser and Stefan Gaenzle of the German Development Institute (Deutsches Institut für Entwicklungspolitik DIE) on Deutsche Welle, Dr Barnes outlined that, once technology and cost allows, Africa could become a major source of energy.

The Desertec project aims to feed solar power from Africa and the Middle East to the EU Thursday night brought a counter perspective at EcoConnect’s Green in the City Event: ‘Future of Solar’ at the London HQ of City law firm SNR Denton. Although heavily slanted towards the investment and banking community, these events always deliver a valuable and informed insight.

Expert panel member Paul McCartie of Investec Capital Markets dismissed ‘desertec’ as unworkable. Sighting “energy security” as the primary issue, he commented: “Following the recent problems caused by a dependency on Russian gas supplies, I can’t see Europe relying on energy generated in African and Middle Eastern nations.”

Good point. Would folks in Milton Keynes rely on a light switch powered by electricity generated in the Sudan?

Last week, Environment writers Louise Gray in the Telegraph and John Vidal in Guardian offered a hint as to what the future may hold.

Both reported on a controversial announcement from International Development Secretary Andrew Mitchell MP that the Coalition Government was committing taxpayers’ money: “To encourage private investors to put their funds towards ‘green’ development projects in Africa and Asia.” Mr Mitchell said: “In Africa, a potential new fund could see up to 500MW of renewable energy per year from 2015 – enough to provide for over 4 million rural households. In Asia the project could generate 5GW of new renewable energy and create 60,000 jobs.” he said.

Aid agencies greeted the news with immediate skepticism: Would private investors be doing this just to bring light and jobs to some of the most energy deficient and impoverished places on earth? Of course not, and Government wouldn’t expect them to.

So what’s going on here? Well, if the near ‘third-world’ is to be explored as a potential source of energy then this could be a sensible way to go – encourage investment under the guise of aid. As for security, Matthias Ruchser and Dr. Stefan Gaenzle are of the opinion that: “renewable energy sources promote development, and development promotes security.”

So what leads us to believe that the development of African renewable energy will not be just an extension of the model followed by other large extractors of raw materials from the continent? The Angola and Nigerian oil fields are by no means models of security and progressive regional development.
Does renewable energy offer an opportunity for a new, fairer approach to international development, or will the same energy security problems prevail?

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Classic definitions of cleantech, and the industries under its umbrella, have gotten long in the tooth. The sector has changed, and taxonomies haven’t kept up.

Why is a clean technology taxonomy important? As a list of nested categories, it shows where a clean technology “fits”. It helps vendors understand their competitive sets. It defines and helps investors understand the breadth of the sector and its sub-categories, and helps research and data organizations report consistently.

So if it’s so important, why haven’t leading cleantech taxonomies kept pace with the sector’s evolution? Because it’s hard. Especially for cleantech data companies like Dow Jones, Bloomberg New Energy Finance, GTM Research, PwC/NVCA MoneyTree, or Cleantech Group. Any edit could mean having to re-tag years of data in difficult-to-change back end systems. And, truth be told, there are usually more profitable things for a data company to do than pay people to sit around and think about what cleantech is, what it’s not and how the industries it spans should be organized.

Ah, but it’s a different story for a fledgling new cleantech research and advisory shop. At our firm, the taxonomy of cleantech is something many of us have been itching to dig into for years. We’ve seen the limitations in today’s taxonomies. And so, the last few months, I and the high profile consulting, analyst and writer colleagues I’ve been lucky to work with in the cleantech research and consulting team at Kachan & Co. have been quietly working on our own take, which I now get to share with you for your feedback.

It gave us a brand new framework for tagging and scheduling current and future research and analysis

We were able to rethink what many organizations have been holding up as 11 hallowed categories of cleantech (we think there are only 8 that deserve to be high-level categories. See our detailed classification, below.)

We were able to use our collective dozens of years in this sector to make some logical changes that we’d all been wanting to make, e.g. categorizing smart grid as a subset initiative within the larger phenomenon of energy efficiency. Or collecting green building-related materials under a category we call clean industry, recognizing that these materials are used more widely than just in structures for green building.

We adopted terms the market has settled on, and did away with outdated terminology

We chose not to categorize projects financed. Therefore wind, solar, even aquaculture farms don’t appear here as categories. We intentionally framed this as a taxonomy of technology and business model innovation.

It required discipline to remember the exercise was a classification for technologies, i.e. when hardware/software or other systems are involved. It was not a categorization of larger climate change initiatives, for instance… just where tech that’s supposed to get commercialized is involved, and where entrepreneurs and investors hope to make a return.

It forced the internal discussion of whether nuclear is a clean technology. While some argue nuclear has no place in cleantech, we opted to include it, as we’ve recently been made aware of nuclear-related innovations being pursued to derive power from non-weaponizable fuels, and other new R&D aimed at cracking that other historical nut of nuclear power: waste. But those are other stories.

It forced a focus on cleantech-related innovation. For instance, just because recycling is a category doesn’t mean that everything in the recycling industry is cleantech. Likewise semiconductors. Or hydro. But these areas are ripe for clean technology innovation, and there are new cleantech breakthroughs happening in each there today. Hence their inclusion.

After years of writing thousands of clean technology articles and reports, our team proposes this categorization as a cleantech category taxonomy. But consider this a ‘crowdsourced’ first draft. We’re interested in industry feedback before calling this done. Weigh in with comments on this same taxonomy posting on OUR site, and we’ll incorporate your best thinking in a final version we’ll publish on our website here a few weeks from this writing. We’ll then start using the final as a framework for other forthcoming cleantech information products, and invite you to use it, too.

(Credit: dozens of others’ frameworks were reviewed in this process, but special acknolwedgement to taxonomies from Cleantech Group, China Greentech Initiative, StrategyEye, Greentech Media, Skipso and Wikipedia, all of which informed our final structure below.)

In outline form, Kachan & Co’s taxonomy of what fits where in cleantech:

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As wind come out at a robust 9.9GW in 2009, Solar at maybe 600MW, etc, it looks like the zero-emissions folks will again install a majority of incremental MWs. The balance is mostly natural gas a little bit of Coal. Getting this number of 100% by 2012 and then above 100% by 2015 will be critical to achieving emissions reductions in our electricity sector. So what are the barriers:

1) Project Finance — we have to acknowledge that the arms race that we have on the tax credit side has to be reversed. Natural gas, coal, wind, solar, etc will have to agree to eliminate their Federal Tax Credits. If we can take all fossil fuel credits a phase them out over a few years and allow the wind and solar credit to expire when they are due, project finance would get a lot easier and you could go offshore for the money.

2) Respect — we are still looking to build new Nuclear, Coal, and other resources when we can show on paper that distributed energy combined with aggressive energy efficiency, smart grid, and storage can compete favorably while creating more jobs. This means that we need the DOE and other credible bodies to start publishing research in this area at an accelerating pace.

3) Liquidity support — many renewables projects can cost less than $10MM. For these project, efficient access to capital markets are difficult. Using a Fannie Mae like body to buy these projects under fixed rate of return formulas and selling them to Wall Street would help bring liquidity to the system

The technology is ready to meet the price points of the electricity industry, but integration and scaling takes a level of cooperation that we have here-to-for not seen. This can be done without more money from the Federal budget and at a cost that is less than new Coal, new Nuclear, and new Transmission.

Watching this play out will be fun. For more information this is a good report from Black and Veatch.

When a man like T. Boone Pickens — a billionaire, an oilman, an ardent capitalist — makes such a play, the corporate and finance worlds take notice: clearly, wind isn’t just for tree-huggers anymore.

Sure, Pickens is into wind so that he can make a lot of money, but now he’s taking even bigger stances. In early July, Pickens announced the so-called “Pickens Plan” — a massive lobbying campaign targeted towards DC with the key theme of reducing America’s dependence on oil. And, he wants YOU! to join his campaign.

Pickens — remember, he’s a self-described oilman — says that he thinks that oil production has peaked, and that “this is one emergency we can’t drill our way out of.” For Pickens, the answer is: renewable energy. “If we create a new renewable energy network, we can break our addiction to foreign oil.”

It must be pointed out that, at least until vehicles fundamentally fueled somehow by electricity are widely in use, adding more wind energy to the U.S. supply base is going to displace almost no oil consumption. That said, with a move towards plug-in cars (hybrids or pure electrics), or hydrogen-powered vehicles, electricity from wind and other renewables can (someday) achieve what Pickens dreams of.

In any event, it’s hard to fault anyone who wants to elevate the importance of the energy debate in national politics. If he wants to spend some of his money not on wind turbines but on other forms of hot air, more power to him.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. (Note that Mr. Stuebi has no professional relationship whatsoever with BP — either the oil company or Mr. Pickens’ firm.)

Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

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In his speech in Constitution Hall this week, former Vice President and renewable energy investor Al Gore extolled a stretch goal challenging America to achieve 100% renewable power within 10 years. The quote: “Today I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years.” And my favorite part: “When President John F. Kennedy challenged our nation to land a man on the moon and bring him back safely in 10 years, many people doubted we could accomplish that goal. But 8 years and 2 months later, Neil Armstrong and Buzz Aldrin walked on the surface of the moon.”

That statement is about like challenging your 2 year old to finish college by the time she is 12. Not exactly practical, more than a little crazy, and likely to be either ignored, or if you push it, to cause lots of therapy sessions by the time she is 8. I will, however, credit him with getting almost every renewable energy platitude I’ve ever heard into one succinct speech.

He does raise lots of good points about the need for a new energy policy not built around shipping dollars to the MidEast for oil (a definite must), for long term support for renewables (it is critical for us to get off our fits and starts mish mash idea of renewable energy policy), and for moving faster and larger to fight climate change (a topic near and dear to my heart, and one that is only partially helped by making broad statements about how fast the sky is falling, I mean, the glaciers are melting). In fact, there is no better way to give anti renewable energy and climate change naysayers fuel and ammunition than to make statements like these. Any path we go down, I’d still rather challenge that two year old to do something they can achieve, not try and make it through college by age 12 – especially if I’m asking her to pay for it. Slow and steady wins the race.

The core of Al Gore’s argument in his speech on the practicality of a 10 year all renewable energy goal boils down to this quote from his speech on fuels:

“What if we could use fuels that are not expensive, don’t cause pollution and are abundantly available right here at home?

We have such fuels. Scientists have confirmed that enough solar energy falls on the surface of the earth every 40 minutes to meet 100 percent of the entire world’s energy needs for a full year. Tapping just a small portion of this solar energy could provide all of the electricity America uses.

And enough wind power blows through the Midwest corridor every day to also meet 100 percent of US electricity demand. Geothermal energy, similarly, is capable of providing enormous supplies of electricity for America.”

And this one on costs and technology:

“To those who argue that we do not yet have the technology to accomplish these results with renewable energy: I ask them to come with me to meet the entrepreneurs who will drive this revolution. I’ve seen what they are doing and I have no doubt that we can meet this challenge.To those who say the costs are still too high: I ask them to consider whether the costs of oil and coal will ever stop increasing if we keep relying on quickly depleting energy sources to feed a rapidly growing demand all around the world. When demand for oil and coal increases, their price goes up. When demand for solar cells increases, the price often comes down.”

These quotations, while partially true and very seductive, are highly misleading in this context. The effective conversion rates of that energy to usable electric power or liquid fuel is still horrendously low, and requires lots and lots of capital expenditures, and thousands of miles of new transmission lines to implement. And that’s not taking into account the state of technology – as an industry we really are the two year old in my analogy.

So given those conversion rates and the current high capital expenditures per unit of energy, the cost is still 5-20x (depending on what you count) the cost of conventional electric power generation (yes I know, unless you add in the carbon price and environmental externalities, but that’s still extra cost any way you slice it . . . unless you’d like to subsidize mine). Frankly no serious analyst is suggesting that within 10 years, given the state of technology and the best case forecast capacity, that solar can make up more than a small single digit fraction of even electricity needs or that wind can make up more than a meaningful minority share (let alone after doubling the global power demand by replacing liquid fuels in cars with electricity, which Al Gore also suggests), especially given lead times on power plants and transmission lines.

Most likely even if the technologies were already cost comparative, which they are not – if you need evidence, just look at our wind and solar industries in their current tizzy because their biggest subsidy programs are up for renewal this year – most analysts wouldn’t project a fabled grid parity on cost for renewables for at least the next decade, and certainly not at scale. So Mr. Gore’s statements on cost and technology are in part true, but imply a maturity level in these industries that just doesn’t exist yet. Given manufacturing scale up issues on the technology, transmission infrastructure requirements at least as large as the new generation requirements, and long lead times on building projects of this size (industry executives point to seven year time frames just to build a single transmission line), probably reaching even significant low double digit percentages of carbon free power within ten years is a stretch (excluding large hydro and nuclear which we already have but are hesitating to expand) across the whole nation. Notwithstanding that California has managed to come close to its target 20% number over the last decade, that’s one state leaning on the resources of many states, using the best available sites, federal subsidies paid for from all of our pockets, and that took a decade. When it comes to carbon capture and storage for coal fired generation, a concept with lots of legs – if it works – 10 years just isn’t enough time to achieve scale. The first big pilots are scheduled over the next several years, and there are too many unknowns to bet the farm on, without the lead time and capital cost issue. Though still definitely worth trying.

And as far as paying for it, there was an article in the San Francisco Chronicle today calculating our Federal government long term liabilities at $450,000 per American already mainly for Medicare and Social Security. Actually trying to replace our entire fossil fuel infrastructure within 10 years would push that to how much? Somebody please do the math before we launch a government funded mission to the moon, or legislate that our citizens pay for it instead. On costs, Mr. Gore made the statement in his speech “Our families cannot stand 10 more years of gas price increases.” I agree, but Mr. Gore, your 10 year, hell for leather, man to moon race for 100% renewable energy would guarantee just that.

So while extolling stretch goals for a two year old is probably a good idea, let’s keep it within the realm of possibility, and not just make grandiose statements for media effect. Now if Al Gore’s silly challenge on renewable energy was simply a trojan horse to get people talking about how to move forward on fighting climate change and addressing our long standing energy policy issues, I’m all for that and am happy to help. After all, the words Al Gore and climate change make for very searchble blog articles! But personally when I make outlandish statements, I do like to bring an modicum of practicality to the discussion.

I will leave you with one final note, and please remember, I am actually a proponent of the ideals in Al Gore’s speech, I just prefer to get there in one piece. One theory on the effect of the history of the man on the moon driven space race that Mr. Gore challenges us to copy basically says that we pushed for a single high profile goal so fast and furious that we effectively skipped ahead and outran our infrastructure and capabilities to get a nonscalable shot at the moon in the target time frame. The theory goes on to suggest that’s why after reaching the moon so fast we haven’t progressed at the same rate in space since, and had we taken it slower, we would have gotten there a few years behind, but might be on Mars by know. Akin in a military campaign to outrunning your supply chain, and then getting your army surrounded and destroyed – or perhaps invading a country half way around the world, winning the war in weeks and forgetting to prepare for the peace. And just to show that I can deliver as many platitudes in one article as Mr. Gore, that’s why you never get involved in a land war in Asia.

Energy and environment are the two pillars of everything in our lives. Mr. Gore and I want the same thing, but he thinks we can’t afford not to swing for the fences – I think we can’t afford to mess it up.

In their so-called “BLUE” scenario (I haven’t figured out what “BLUE” refers to), a 50% CO2 reduction from 2005 levels by 2050 — what many scientists believe is about what needs to occur to stabilize the climate — is only achievable by tackling emission reductions that have a marginal cost of over $200/ton CO2. Ouch!

Even more provocatively, IEA estimates that the BLUE scenario would imply a widespread move to near-zero carbon buildings and the deployment a billion electric/hydrogen vehicles plus annual investments between 2010 and 2050 of 55 coal plants with carbon sequestration, 32 nuclear plants, 17,500 utility-scale wind turbines, and 215 million square meters of solar panels. By their accounts, this represents $45 trillion of investment above and beyond business as usual.

In IEA’s words, “BLUE is only possible if the whole world participates fully” in shifting to “a completely different energy system.”

Does anyone doubt the magnitude of the CleanTech challenge/opportunity in the coming decades?

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Cleantech Blog had a conversation last year with Stuart Hemphill, now the newly appointed Vice President for Renewables and Alternative Energy at Southern California Edison, a subsidiary of Edison International (NYSE:EIX), one of the largest purchasers of renewable power in the US. We caught up with him again today in a lively discussion around his predictions for the renewable sector.

Today they are announcing their sixth competitive solicitation for renewable energy. On peak delivery from the Tehachapi region is preferred, as they are currently building a massive transmission line to tap into the 4,500 MW of wind potential. But wind produces only 35% of the time. This major pipeline needs to be balanced. So they are looking for creative proposals from developers to fill up the rest of that transmission line with on peak power deliveries.

Renewable and alternative energy are still top goals for Edison. Stuart says his promotion is part a reflection of the business’ expanding interest in leadership in renewables in the US.

Prediction Number 1 – The next 10 years are going to be a wild, wild west in the solar industry. Companies around the globe are exploring new solar technologies of every variety. Stuart thinks it’s way too early to tell which ones are going to be successful. But he considers solar to be the great untapped resource in California and elsewhere.

So I asked him if by that he meant solar thermal or photovoltaics. The answer is “Yes”. Stuart responded that in the past couple of years we have seen incredible amounts of venture capital investment going into solar firms, and PV is only part of that equation.

When I pushed Stuart to predict a winner between conventional solar parabolic trough and other types of solar thermal technologies, Stuart refused, suggesting that it is still too early to tell which technologies will be the winners. That’s what makes it exciting to watch, in his opinion. As an example, he stated that we are now seeing renewed interest power tower technologies with pretty high efficiencies. The challenge is to see which ones get done.

When it comes to what’s important to SoCal Edison itself, it is really important that they sign PPA contracts with viable companies and viable technologies. He sees a wide spectrum of proposals in terms of viability, and is always looking for at least some sort of demonstration plant to prove it up and a significant level of backing for the companies before they can get involved.

Prediction Number 2 – I did ask him what his take on run of river hydro is. He responded that he hopes to be wrong, as he likes run of river hydro, but doesn’t see any major increases in the resource coming in California. Hydro in California in general has a very a limited resource potential left to be developed and lots of stakeholder concerns to be addressed in each case, so while he is hopeful, he is not predicting any great increases.

Prediction Number 3 – US Offshore Wind – We will not see much from offshore wind in California, as the limitations both from physical layout of shoreline as well as policy and consumer concerns.

We then switched to what the industry challenges are. Stuart nailed two big ones, transmission and interconnection.

He believes that transmission is getting even more challenging than last time we spoke. What’s interesting to Stuart is that most people agree and are in support of renewables in California, but very few people support the way that the goals need to be attained, ie, significantly increase transmission infrastructure. There tends to be lots of local opposition, or federal agencies that aren’t always in support of particular local goals. This makes sense, as transmission by its nature always touches a lot of different land and communities in its path, meaning lots of different stakeholders need to be involved.

Interconnection queue bottlenecks are the real next challenge in California and in the Midwest according to Stuart. This is a challenge that is addressable and there are proposals into FERC to do so. But currently it is a first come first serve system, and easy to get into the queue. Getting in the queue starts a study process based on FERC rules, including a feasibility study, then a system impact study and a facility study. The bottleneck arises because according to the current rules, if your facility is further back in the queue, your studies assume that the facilities ahead of you are up and running, but if at any point in time someone ahead of you drops out, your studies need to be effectively redone. Because it is relatively easy to get into the queue, nonviable projects that do not end up coming online as planned have been upsetting the applecart, causing all the projects behind them to go back to the drawing board as far as the study process is concerned. Since 2002, we’ve seen a steep ramp up to a level that is just unmanageable given that dynamic. CAL ISO has a proposal in with FERC to change this, so Stuart believes a solution is coming, just not here yet.

As usual, SoCal Edison is pushing forward aggressively on renewables, and we were excited to see the new solicitation and changes they are making. As we have said before, let’s just get it done.

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I have long had a respect for GE (NYSE:GE), and how it runs its business. In cleantech, I am very, very jealous. They have made themselves into the company to beat. Whether by plan, luck, or simply applying sound business discipline, GE has made itself into a top 3 global cleantech player no matter happens. And they did it for a fraction of the price, and a lot less risk than anyone in Silicon Valley or the energy sector. Venture capitalists beware, in cleantech, the behemoths have beat you to the punch, have done it cheaper, faster, and with more grit than you realize.

5 step Cleantech Program by GE

Wind – In 2002, GE bought Enron Wind out of Enron’s bankruptcy for about $300 mm, making GE one of the top 5 wind players overnight (it’s now well in excess of a billion in revenue). It was their first cleantech steal, right before the wind industry got amazingly tight (and huge).

Power – In 2003, GE acquired one of the leading gas engine manufacturers in Jenbacher, making GE an overnight leader in small, clean power systems, and powering their way into everything from distributed generation to landfill gas markets.

Solar – In 2004, just before the solar boom, GE acquired Astropower, one of the top 5 solar energy companies in the US, for less than $20 million out of bankrupcty, after the company was delisted following accounting irregularities. You cannot even build a single solar manufacturing line for $20 mm. Only the subsequent silicon supply shortages, and a lack of the needed investment in the business and next generation technology kept GE from making a homerun out of it. But despite that, there will never be another steal in solar quite like this.

Water – In 2005, GE acquired one of the largest water technology businesses in the US, Ionics, to complement its previous acqusitions in the water sector. Paying a full price of $1.1 Billion, it virtually guaranteed GE a top 5 position in the reverse osmosis, desalination, and water purification markets going forwrad, right after Ionics was shored up through a merger with Ecolochem.

Ecomagination Brand – Then on the back of these deals, in 2005 GE launched its Ecomagination initiative, and anchored the entire company’s image around its new cleantech empire.

That, my friends, is the way you make money in cleantech venture capital. I would venture to guess that GE has made 10x its money, no matter how you spin it. Or put another way, an IPO of the GE cleantech business would be the hottest thing in years.

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The EPA has banned sulfur in gasoline but not in batteries. Sulfur, in the form of a sodium salt, has been used as large-scale storage systems. Pioneered in Japan, these batteries are gaining acceptance in the US as a reliable form of energy storage.

Due to the intermittent nature of wind energy, storage systems are needed to make wind power more reliable. The sodium sulfur battery is not only affordable and compatible with these turbines, they are robust and responsive to the output of the generators.

Jim Fraser writes in the Energy Blog:The 50-kilowatt battery modules, 20 in total, will be roughly the size of two semi trailers and weigh approximately 60 tons. They will be able to store about 6.5 megawatt-hours of electricity, with a charge/discharge capacity of one megawatt. When the wind blows, the batteries are charged. When the wind calms down, the batteries can be used to supply energy to the grid as needed.

Such systems will can power up to 500 homes for over six hours.

Whale Inspired Wind Turbines

The shape of sea creatures have inspired the design of ships. Now, they are also inspiring the design of blades used in wind turbines.

Like the wings of an airplane, the blades can also suffer from drag, reducing it’s overall efficiency. Now, a company in Canada has developed a new design that greatly improves the efficiency.

Hank Green writes in EcoGeek:Using these little “tubercles,” a new firm in Toronto has created fan blades that have 32% less drag and are, overall, 20% more efficient at moving air. The new design could lead to similar gains in wind turbines, though the testing and certification process for turbine efficiency takes some time.

For an in-depth analysis of the science behind these modified blades, take a look at the paper recently published in Physical Review Letters.

Cellulosic Ethanol Dead on Arrival?

Clearly, cellulosic ethanol would have much more environmental benefits to corn-based fuel. Scientists believe that cellulosic technology may be viable within five to 10 years but there are many logistical issues that have yet to be solved.

…you still have to haul all of this biomass to the plant, convert the cellulose (and get a low concentration of ethanol for your efforts), and then get rid of a sopping wet mess of waste biomass. Sure, it can be burned – if you spend a lot of energy drying it first. Because of the very nature of the process, I don’t believe this challenge will be solved…

Frank Ling is a postdoctoral fellow at the Renewable and Appropriate Energy Laboratory (RAEL) at UC Berkeley. He is also a producer of the Berkeley Groks Science Show.

Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

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In his book How to Win Friends and Influence People, Dale Carnegie says that people are motivated by a sense of importance. For many people that means gaining status.

Now that green is entering the mainstream, it is also a status symbol among a growing segment of the population. Should we be concerned with what Helen Priest from Meridian Energy calls “conspicuous sustainability”?

On CNET’s Green Tech Blog, Neal Dikeman observes that the notion of sustainability is being driven by the need to be cool.

“Nouveau riche tech execs out here in Silicon Valley put ultraclean, and even more, ultraexpensive, solar power on their roofs. Buckingham Palace offsets the carbon footprint of the Queen’s recent trip to the United States. Dell has Plant a Tree for Me Program, which I used when I bought a new Dell last month. There is an exponentially increasing number of examples of consumerism driving green.”

But is this good or bad? Back in the 20th Century and even before that, economist Thorstein Veblen described the rush to accumulate wealth as “conspicuous consumption”, which he thought to be evil.

Mr. Dikeman cautions “for green tech and the environmental movement, is conspicuous sustainability a good one?”

Who could have thought that food chemistry could play such an appetizing role for plastics? The Japanese have found a way to incorporate one of the main ingredients of curry into biodegradable plastic.

“curcumin, a plant-based yellow colorant, is highly compatible with biodegradable plastic and has appropriate colorfastness and mechanical strength properties. It has also been proved that curcumin does not harm human health even when it comes in contact with the mouth, making it applicable to food packages, processing equipment and toys. Curcumin can color biodegradable plastics not only yellow, but also bright red, blue, etc.”

Now if only we could eat the plastic… 🙂

Castle House

Putting wind turbines on the top of skyscrapers may be becoming reality.

In this week’s EcoGeek, Hank Green writes about a proposed high-rise that will get its power from wind.

“Take up residence in the Castle House, a proposed London Skyscraper, and you’ll find yourself paying as much as 40% less on power, as the building will be generating most of it for you. The building is designed to aerodynamically channel wind through the three nine meter turbines that sit on top of the 43 story building. “

Frank Ling is a postdoctoral fellow at the Renewable and Appropriate Energy Laboratory (RAEL) at UC Berkeley. He is also a producer of the Berkeley Groks Science Show.

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The Natural Resource Council of Maine (NRCM) sponsored a tour of the Mars Hill wind farm this past Saturday. I went along to represent Maine Interfaith Power & Light (MeIPL) and to talk about Wind Watts, the renewable energy certificates (RECs) generated by the 28 turbine, 42MW project. MeIPL is the primary reseller of RECs from Mars Hill.

A group of about 30 made the trek by bus to the Big Rock Ski Area which sits below the project at the Canadian border. (The Boston Globe covered the trip.) We heard from a number of people involved in bringing the project to life. Dave Cowan, VP of Environmental Affairs for UPC Wind Management, the developer of Mars Hill, answered questions including the usual ones about bird kill and noise. Pat DeFillip, Project Manager for Reed & Reed which constructed the project — with Maine labor — showed pictures of the construction in all its phases. Ryan Fonbuena, a UPC technical manager originally from California, enlivened the crowd with a broad youthful smile, considerable technical knowledge, and a necklace of white shells (he’s been working on a Hawaii project as well).

The Mars Hill 1.5MW GE wind turbines are awesome by its most positive definition: breathtaking, formidable, stunning, wondrous, majestic. Try as I might, I cannot see them in any other way.

We heard from people in the community: a landowner who has multiple turbines on his property and wants to retail products oriented around the wind farm; a real estate agent who sees no decline in property values as a result of the wind farm; proprietors of a hotel; the town manager; the manager of Big Rock Ski Area. All were open and frank about the reasons for the complaints from a few vocal members of the community. Our group repeatedly asked, “is that the noise they don’t like?” expressing concern for the community and trying to get their heads around the complaints. One resident said he believes the opposition to the turbines is one of aesthetics and that leads to all the other complaints…which, he believes, are dying down. He also noted that he received his property tax bill; it’s $200 lower because of the money put into the town by the project.

At the end of a long day, as a thunderstorm moved in, I spoke about Wind Watts. I’m not fully comfortable with RECs for the many reasons that others like Richard Stuebi have written in this blog. However, Wind Watts I can pitch with equanimity, particularly after talking about how the Interfaith Power & Light organization came into being and why it exists: it’s a moral calling to support the planet and people with clean energy. It’s a faith-based response to climate change. Here’s this wondrous project, I could say with a swoop of the arm across the ridgeline and slowly spinning turbines. You’ve met the construction company and the developers, I could say, looking right at Ryan Fonbuena of UPC. You’ve heard what it means to the community, catching the sparkling and proud eye of the Big Rock Ski Area manager. Buy these RECs and you will support this project and encourage others like it.

I stumble in talking about RECs when they become entangled with carbon offsets, as if buying RECs to offset carbon emissions is the only reason to buy them. So I didn’t go there. I didn’t have to. The first question from the group was, ‘isn’t buying RECs simply a way for some people to go about their lives without making any changes, so they don’t have to feel guilty?’ This business of assuaging climate change guilt with RECS (like the business of bird kill and noise) is mass media at work. After a brief group chuckle around guilt, Dylan Voorhees, Energy Project Director for NRCM, explained the whole black electron, green electron, green attribute/REC thinking. I’ve been hearing this explanation for years and I’ll buy into it — so long as new wind is more expensive to build than the alternatives. Before carbon became all the rage, I could talk about RECs for what they are: financial mechanisms to encourage development of clean energy. To jump on the carbon offset marketing bandwagon for RECs is, I believe, limiting. And darn confusing.

Heather Rae, a contributor to cleantechblog.com, manages a ‘whole house’ home performance program in Maine and serves on the board of Maine Interfaith Power & Light. In 2006, she built a biobus and drove it from Colorado to Maine. In 2007, she begins renovation of an 1880 farmhouse using building science and green building principles.

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The cleantech sector received a huge boost this week from the news that Portugal’s EDP anounced the acquisition of Texas based Horizon Wind for a price of over $2 Bil. EDP operates globally in Spain, Portugal and Brazil.

One of the intriguing aspects of this deal is the history. Horizon Wind was formerly Zilkha Renewable Energy, before it was purchased by Goldman Sachs in 2005.

According to their websites Selim and Michael Zilkha were the previous owners of Zilkha Energy, which started in the mid 1980s and grew to be one of the largest privately held independent E&P companies in Texas, before selling it to Sonat in 1998 for $1.04 billion plus debt. Zilkha primarily operated in the shallow water Gulf of Mexico, and was one of the early users of 3D seismic on a large scale.

Starting after that 1998 sale they moved into renewables, and built Zilkha Renewable Energy into a sizeable player in the wind market before selling to Goldman Sachs in 2005. The Zilkhas are now involved in a biomass power business. It is interesting to note that both Zilkha Energy and Zilkha Renewables’ claim to fame was having gotten in early and built an aggressive leasehold position. In some respects, they grew their wind business in many respects like a traditional oil exploration company, build a large lease portfolio first, prioritize your development resources, apply best available technology, build out your infrastructure.

It is also highly instructive to see traditional energy capital plowed into a wind company, only to sell it to a major Wall Street firm, which after additional investment subsequently flipped the business in less than 2 years to a major European utility. Texas oil money makes good in renewables? No wonder Texas has passed California in wind energy generation. Perhaps we are finally entering a new era of maturity in renewables.